Early this month of April 2018, the Insurance Commission released the rankings of life insurance companies based on premium income, among others. What stands out is how AXA performed last year. Simply put, AXA Philippines made the biggest jump in terms of Total Premium Income. In layman’s term, Premium Income is the income that an insurer (for example, AXA) earns from premiums or the payment made by customers to their policies.
Two (2) notable things can be gleaned from AXA Philippines’ performance last 2017:
AXA Philippines grew 4x faster than the top 5 competitors. It even exceeds the combined growth of the top 4 insurance companies.
Its non-life insurance arm, AXA Charter Ping An, is now ranked no. 3, while outpacing the market growth rate at 17%.
More than the numbers, I have witnessed it first-hand, being a Financial Advisor myself, why it’s not surprising that AXA’s growth is truly remarkable. It’s not even close. The numbers grew by leaps and bounds. What caused it?
1. Excellent Investment Returns of its Peso and Dollar Denominated Funds.
The top Peso Fund’s Annualized yield is between 14% to 15% at a time when the market is very volatile and unpredictable while its top Dollar Fund’s return is 100% in 5 years* and doing at an annualized rate of 15%. From 2016 to 2017, AXA ranked 2nd and 1st in Single Pay Products, perhaps owing to the new Single Pay product that was offered online that has a captive market among the Millenials.
People are looking to park where their investments will bear fruit in the short and long term and I believe this is one reason why many investors are transferring their investments from another provider to AXA because they get to experience real returns. I’ve had more than a couple of clients who crossed the line with AXA because they are not happy with the performance of their investments from their previous provider.
*AXA’s Dollar-denominated product, Global Advantage Fund’s Cumulative Performance Rate reached 100% in August 2017, 5 years from the product’s inception date. As of Feb. 2018, it is already at 122%.
2. Innovative Health products.
AXA is unparalleled when it came out with its trailblazing health insurance products. First, it came up with Health Max (2015), designed to cover major and minor critical illnesses beyond retirement age (up to age 100), on top of featuring a savings program and being in itself a life insurance product. It was an instant hit, a bestseller; thereby giving credence that there is a huge demand for this type of product in the market.
Last 2016, AXA Philippines launched Global Health Access, the gold standard in healthcare products. Why? Because it has a yearly coverage of P100 Million; you get to choose your own doctor and hospital locally and globally; and it is renewable up to 99 years old. Strong key features that are unmatchable in the industry.
3. More Educated Market.
In the Philippines, life insurance is sold, not bought. In the 80s and 90s, the way life insurance was sold was through the traditional way of pushing (selling) a particular product. Buy this product, says one agent, and mostly it is sold to the agent’s natural market (family, friends, colleagues).
I am glad that times have changed and the market has evolved. AXA has contributed significantly in redefining standards in the life insurance industry by educating the market. Is there a specific market? In general, the market is everyone in the Philippines that are insurable.
As of this writing, the Philippines has about 103 M population. Only 15% of the Philippine population are insured and if you will break down this 15%, you will see many repeat customers, ie., people who owns more than one policy.
It is said that an average person should have at least seven (7) life insurance policies. Why? Because there are seven (7) reasons to buy life insurance, namely, for the purpose of preparing for: 1. Retirement; 2. Savings; 3. Income Protection; 4. Education Funding; 5. Estate Planning; 6. Investment; 7. Medical or health fund.
Gone are the days where you will buy a product just to accommodate a friend, if not to help or please an agent friend. You buy life insurance because you have a need for it.
Through AXA’s Financial Needs Analysis (FNA) Tool, it has helped a lot of people become more informed and educated about the importance of Financial Planning. Through this FNA tool, more people became educated and informed about the importance of buying life insurance. But, it is no longer about buying life insurance per se but more of preparing oneself financially for the expected and unexpected events in one’s life events. This FNA Tool is one major reason why AXA is now a major player in the life insurance market in the Philippines.
In this regard, I have high hopes that sooner than later, life insurance in the Philippines will be bought not sold because the Philippine market has matured.
Disclaimer: The views and opinons expressed in this article are those of the author and do not necessarily reflect the official policy or position of AXA Philippines.
Fulgencio Jeronimo Reyes (Ronnie Reyes) is an Executive Financial Advisor and an incoming Unit Manager at AXA Philippines. He was an MDRT Qualifier /Awardee last 2016. He may be reached at email@example.com or through viber at 0917-796250.